3 ms·

I evaluate being able to "walk away" as being able to maintain the status quo indefinitely. The slow revenue reduction that you are describing is applicable to

I evaluate being able to "walk away" as being able to maintain the status quo indefinitely. The slow revenue reduction that you are describing is applicable to any business model with a recurring revenue set up. Sure it's not bad, but the company begins to die the moment they leave.

swombat 18y ago
You can't walk away from investments either by that definition. There's an old Romanian saying: The cow grows fat under the eye of the farmer. Investments are just another business model with recurring revenues. It begins to die the moment you stop managing it. You can get a professional manager for that too - but they too require attention.
- run4yourlives 18y ago
  I'm sorry, but I'm not getting your argument. What does investing have to do with whether or not 37Signals' founders can walk away from their business?
  - swombat 18y ago
    I'm saying that with your definition of "walking away" (can stop giving a shit and the income still comes steady forever), not even people who do sell their company can walk away. All they're doing is shifting from a business that they love and have poured their hearts into (their startup) to one which they may well hate and which they may know nothing about (investment management). Both require attention to thrive.
    - deleted 18y ago
      [deleted]
    - run4yourlives 18y ago
      A standard ING account is at 4% right now. on $5M, that's $200K. What exactly do you have to manage again?
      - mechanical_fish 18y ago
        Watch out for the inflation rate! If inflation is at 4% your ING account is worthless and you're spending down your principal in real terms. Believe me, I've been thinking a lot about that recently. That said, your point is taken: There is some amount of money where you can set up some fairly risk-free, static investments and take out $X every year indefinitely. Just make sure you do a little more thinking upfront about how much money that is, and what static investments those are.
        nostrademons 18y ago
        TIPS or I-bonds would seem to be the prototypical example: they guarantee a certain real rate of return (about 2% when I looked a couple years ago, though I heard it's gone negative with the credit crunch), so if you've got $10M or so you're guaranteed your $200k. Only thing you have to worry about is a government default, but if they do that, you have bigger problems to worry about than what happened to your money.
- pchristensen 18y ago
  They've made so much money that they could walk away, let it die, and still be richer than most successful startup founders. Just think of the HotOrNot guys - who cares if it dies if you've already pulled $5 million apiece out of it?
pchristensen 18y ago
I evaluate being able to "walk away" as having the kind of FU money pg says founders get from an acquisition. By my math, pg made between $10-$30 million. I don't know what his cut of the $50 million was, but Stan Reiss (?) from Startup School 2005 said the Yahoo stock value went up from $50mil to $750 mil, so whatever pg kept in Yahoo stock went up by 15x. We don't know how much Yahoo he kept post-crash, but I'd peg him still over $5mil, maybe up to $30mil if he's Mark Cuban savvy. I don't think the 37s guys have accumulated that much, but I'd bet they have more than any YC alum (so far - we'll look again when YC is 5 years old).
- run4yourlives 18y ago
  Ah, I had a different view of "walk away" then. I was thinking more of a "hit by a bus" analogy. Using your definition, I don't think walking away is something anyone on that team is interested in doing. They're already living in their "walk away" phase.

swombat 18y ago

You can't walk away from investments either by that definition. There's an old Romanian saying: The cow grows fat under the eye of the farmer. Investments are just another business model with recurring revenues. It begins to die the moment you stop managing it. You can get a professional manager for that too - but they too require attention.

run4yourlives 18y ago
I'm sorry, but I'm not getting your argument. What does investing have to do with whether or not 37Signals' founders can walk away from their business?
- swombat 18y ago
  I'm saying that with your definition of "walking away" (can stop giving a shit and the income still comes steady forever), not even people who do sell their company can walk away. All they're doing is shifting from a business that they love and have poured their hearts into (their startup) to one which they may well hate and which they may know nothing about (investment management). Both require attention to thrive.
  - deleted 18y ago
    [deleted]
  - run4yourlives 18y ago
    A standard ING account is at 4% right now. on $5M, that's $200K. What exactly do you have to manage again?
    - mechanical_fish 18y ago
      Watch out for the inflation rate! If inflation is at 4% your ING account is worthless and you're spending down your principal in real terms. Believe me, I've been thinking a lot about that recently. That said, your point is taken: There is some amount of money where you can set up some fairly risk-free, static investments and take out $X every year indefinitely. Just make sure you do a little more thinking upfront about how much money that is, and what static investments those are.
      - nostrademons 18y ago
        TIPS or I-bonds would seem to be the prototypical example: they guarantee a certain real rate of return (about 2% when I looked a couple years ago, though I heard it's gone negative with the credit crunch), so if you've got $10M or so you're guaranteed your $200k. Only thing you have to worry about is a government default, but if they do that, you have bigger problems to worry about than what happened to your money.
pchristensen 18y ago
They've made so much money that they could walk away, let it die, and still be richer than most successful startup founders. Just think of the HotOrNot guys - who cares if it dies if you've already pulled $5 million apiece out of it?

pchristensen 18y ago

I evaluate being able to "walk away" as having the kind of FU money pg says founders get from an acquisition. By my math, pg made between $10-$30 million. I don't know what his cut of the $50 million was, but Stan Reiss (?) from Startup School 2005 said the Yahoo stock value went up from $50mil to $750 mil, so whatever pg kept in Yahoo stock went up by 15x. We don't know how much Yahoo he kept post-crash, but I'd peg him still over $5mil, maybe up to $30mil if he's Mark Cuban savvy. I don't think the 37s guys have accumulated that much, but I'd bet they have more than any YC alum (so far - we'll look again when YC is 5 years old).

run4yourlives 18y ago
Ah, I had a different view of "walk away" then. I was thinking more of a "hit by a bus" analogy. Using your definition, I don't think walking away is something anyone on that team is interested in doing. They're already living in their "walk away" phase.